Apple, Wippit, iTunes Match and the death of Big Music

October 04, 2011 8:56 AM EDT

Apple [AAPL] today is expected to introduce its super-fast, voice-savvy, revolutionary fifth-generation iPhone. The company is also expected to unleash the file-sharing amnesty-like services of iCloud and iTunes Match -- on a day which ironically also marks the tenth anniversary of the founding of the world's first legal P2P music-sharing service, Wippit.

Music industry enters 2001

This is worth a moment's thought.

As we recognize, iTunes Match seems set to give you access to all your music in the cloud for a set fee, effectively becoming something like a year zero moment for file-sharers. It's a defining deal in which the labels are getting paid money for the cloud-based music service iTunes users will pay for, and users should get access to tracks they obtained in different ways.

This could be a good thing, in the sense of bestowing legality on the habits of the file-sharing music population, but things could have been so different if the labels had been properly switched-on ten years ago.

Back then is when iTunes first appeared on the Mac, the iPod was born and Big Music was attempting to still the wave of P2P music with its own torrents of litigation and government lobbying.

It's also when Big Music began attempting to support legitimate services, but even then it quickly became clear that some were more equal than others.

iPod, iTunes and pocket(book) power

Apple managed to rise to the head of the pack not just because of its iPod/iTunes lock-in, but because as a giant corporation it could pay the eye-watering up-front licensing fees major labels demanded from digital music services for the rights to distribute content.

Add the per-track royalty to those fees and it was clear that Big Music still didn't have its heart wholly in digital music.

This has changed a great deal, now digital is the leading music delivery format, but while labels complain at iTunes and its pre-eminence, they fail to take full responsibility for their part in its success.

The iTunes giant

The road to digital music is scattered with the corpses of many a player who had hoped to create and deliver music services.

Napster -- which we must remember asked labels for legitimate music distribution licenses, and offered them the kind of deals they get from the music streaming services they champion today -- was just one of the many that stood there in the corridors of broken digital music dreams.

Wippit was another. The service kept itself going through clever UK business deals and sheer belligerence, but as the cut to the labels grew and as its visibility began to fade in comparison to the major-backed services, principally iTunes, it eventually ceased trading in September 2008.

That the labels really didn't understand just how times had changed was clear from the start.

They really didn't get it

Paul Myers, Wippit founder and one time CEO, recalls, "Only a few months before [the Wippit launch] I had met in the offices of major label exec in charge of his company's world-wide digital strategy and he told me that 'MP3's will never catch on.'"

"He wasn't even smiling. He was serious. And perhaps I should have seen then that the game was up when he revealed that he didn't write his own emails, but preferred to dictate them to his secretary and read incoming emails from the printed page (and in case you're wondering, he still holds a senior position in a major record company!)."

The reason I note this as Apple prepares to deliver a legal and fully-licensed cloud-based iTunes Match music amnesty to US iTunes users is simple: If music labels had fully embraced legitimate digital music services such as Wippit a decade ago, the music retail landscape would be very different, and it is absolutely certain that the music locker services -- such as those once championed by MP3.com -- would already have become de rigeur.

"The record industry had a chance 10 years ago to own the market, instead of now being a slave to it," said Myers today. "We offered much fairer terms than has become the norm now and could have set the precedent if we'd received the same support we were giving out. The type of freedom of access we are beginning to see was always going to happen, but look at the cost now it has. Years were lost while they were guarding the park gates to keep the crows in."

It is also interesting to note that, when it comes to the question of legitimacy, neither Google nor Amazon have paid for the right to offer music storage services.

Content counts

These are both firms some labels have tried to support in the past in their attempt to unseat iTunes, but, once again, when it come to putting cash on the table and offering music industry a financial lifeline, it is Apple and the smaller digital services, including Wippit, who are -- or were -- prepared to value the musical content the labels say they champion.

As, ironically enough, the original Napster was also prepared to be, though its advances were shrugged off by labels who didn't fully comprehend how much things had changed.

"Now the market is so dispersed, so social, so mobile and the old rules are so non-applicable that the big boys online aren't even bothering asking anymore. It's very sad." Myers remarks.

All this change was predicted long ago by controversial music industry maverick, Wayne Rosso, who in 2008 insisted: "There's no money in content sales -- content is a means to an end. It will eventually be ads-supported and free."

Apple will deliver us its version of the kind of future digital music-savvy types could have imagined ten years ago later on today. The company's iTunes Match service isn't (at least at time of writing) the ads-supported music streaming service some are expecting the company will eventually deliver, but is a step in this direction.

We'll find out what else Apple has to announce later on today. Be sure to check back here for full coverage when it does.

What are your thoughts? Speak up, I'm interested.

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Also from today's Apple's 'Let's Talk iPhone' event coverage, read:

Apple: Faster iPhone 4S ships October 14

Apple breaks iCloud October 12

Apple: Free iOS 5 upgrade ships October 12

Apple confirms Mac sales are up, up, upĀ 

Why Apple may talk Apple Maps when it talks iPhone

Apple, Wippit, iTunes Match and the death of Big Music.